Big bucks come knocking as a new milky way opens up

A fresh and unlikely space has been receiving unprecedented attention from investors. Ever since Kalaari led an investment of $7 million into Milkbasket, there seems to be a buzz around milk delivery startups, as it turns into a seemingly fast growing space capable of becoming a money spinner. Doodhwala and Supr Daily are other milk delivery startups that raised funds, clearly marking this as a growth opportunity area. Sensing this, Kishore Biyani’s Future Group has also devised plans to commence delivery of milk, bread, and eggs at the customer’s doorsteps.

The space has started to get attention with customers opting for different kinds of milk options, depending on their fitness and health requirements. For instance, the requirement for A2 milk, considered by many as healthier due to the presence of beta-casein protein, has been gaining ground. Also, the unorganised nature of milk delivery in the mornings, comes with its own set of challenges as well. Above all, the market opportunity has been growing significantly.

These startups are operating either through a subscription model or by scheduling an order the previous day. To improve margins, some of these players have started to deliver grocery apart from milk. The opportunity looks so good at this point, that there are reports coming in that BigBasket and Swiggy too are looking to enter the space, by possibly acquiring one of these players.

Interestingly, ABB Technology Ventures (ATV), Bill & Melinda Gates Foundation, and Qualcomm Ventures have invested in Bengaluru-based Stellapps Technologies, which is creating automated tools to help improve the quality of milk production. This was ATV’s first investment in India, and the fact that it looked at milk as a sector of choice, shows the importance it has gained of late. The main feature of the Stellaps solution is SmartMoo, an analytics solution that can track an animal’s yield through a wearable sensor.

However, it has to be said that the online grocery market has seen quite a few challenges in the past few years. Survival has been tough for most, with many among them pruning their operations or shutting down completely. PepperTap was the most-prominent company to shut down as it ran out of funds in 2016. So the growing milk delivery opportunity can be seen as a blessing. The Indian dairy market is pegged at $70 billion, according to industry estimates. In days to come, that’s only going to get bigger with the advent of the online milk delivery startups.

A new milky way is here, for the startups to explore.